Fears of Peak iPhone Rattle Asian Apple Suppliers

Shares in Asian suppliers and assemblers for Apple fell on Tuesday after several component makers warned of weaker than expected results, leading some market watchers to call the peak for iPhones in several key markets.

Following a poor forecast earlier this month, analysts and investors voiced concern over the state of Apple’s business, contributing to growing worries that iPhone sales were stagnating and could hurt suppliers.

Fresh warnings on Monday from screen maker Japan Display, British chipmaker IQE Plc and Lumentum Holdings, the main supplier of the Face ID technology in the latest generation of iPhones, hurt technology stocks in Asia on Tuesday.

Last week a media report saying the iPhone maker had told its smartphone assemblers to halt plans for additional production lines dedicated to its new lower-priced iPhone XR had pressured supplier stocks.

Analysts said the lack of technological breakthroughs had put a cap on demand, which would persist in the coming quarters.

“With no new technology in sight next year for the supply chain, this is not ideal for the companies involved,” said Nicole Tu, a Taipei-based analyst at Yuanta Investment Consulting.

“Up through the first half of 2019 we likely won’t see any breakthrough.”

Lumentum on Monday slashed its profit and revenue forecast for the current quarter, while IQE warned that current-year results would be lower. Japan Display lowered both sales and margin outlook for the year as well.

NO CONFIDENCEApple warned earlier this month that holiday sales would miss Wall Street expectations due to weakness in emerging markets including India and foreign-exchange costs.

Apple said earlier this month it would stop giving the number of iPhones, iPads and Mac computers it sold in a quarter, a closely watched metric and a key indicator of the company’s success.

The move led analysts to question the company’s business and its share price has since dropped 12.6 percent.

“(This) indicates that the company itself is not confident about its performance at the moment,” said Park Jung-hoon, a fund manager at HDC Asset Management, which owns Samsung Electronics shares.

“Although Apple has positioned itself as a super-expensive handset maker providing high-end products, its strategy has not been working in emerging markets including China and India as Chinese vendors have been making iPhone-like products,” he said.